Meadow Gold to cease Oahu operations, affecting 216 employees

Hawaii’s oldest and biggest dairy products brand is headed toward a partial shutdown under a scaled-back sale of Meadow Gold operations in the state.

Dean Foods Co., the Texas-based owner of Meadow Gold Hawaii, announced Monday that a pending sale of the only milk processor in the state fell through and that operations on Oahu are slated to cease by the end of the month.

The closure would affect Meadow Gold’s main dairy processing and distribution operation, with 216 employees.

A new buyer has agreed to purchase and continue operating a Meadow Gold processing facility in Hilo along with distribution facilities on Hawaii island, Maui and Kauai with a combined 71 employees, Dean Foods spokeswoman Anne Divjak said.

Though details were not available Tuesday, Dean Foods expects that the supply of Meadow Gold products, including milk, butter, ice cream and juices, should continue throughout the state to stores, restaurants and other customers even though the biggest Meadow Gold facility in Hawaii is being shuttered.

The planned partial purchase follows the termination of a prior sale agreement with Industrial Realty Group LLC.

Industrial Realty, a Los Angeles- based real estate investment firm, intended to buy the more than 100-year-old isle dairy brand as a continuing business to be run by 8 Cow Dairies, a company formed last year by Michael and Debra Pickens.

A U.S. Bankruptcy Court judge in Texas approved the $25.5 million sale April 6 after Industrial Realty made a $2.7 million deposit. The sale, however, fell through.

Eric Beringause, Dean Foods president and CEO, said he was extremely disappointed that the sale to Industrial Realty couldn’t be completed.

“This was a difficult decision but, ultimately, given the timeline of our Chapter 11 restructuring we were not able to find a path forward that would enable our Honolulu operations to continue through our comprehensive court-supervised sale process,” he said in a statement.

Beringause added that Dean Foods is pleased to have reached an agreement in principle to sell the neighbor island facilities and maintain the Meadow Gold Hawaii brand name.

“I want to thank our employees for their hard work, dedication and patience throughout this challenging process,” he said. “We are grateful for their commitment to our customers and our company.”

Dean Foods is not yet publicly disclosing the tentative buyer or a purchase price, according to Divjak.

The new transaction is anticipated to be completed by early May.

Dean Foods, the nation’s largest milk processor, filed for bankruptcy in November and is settling debts by selling its collection of businesses and brands across the country to a variety of buyers.

A company that bought Dean Foods in 2001 and assumed its name has owned Meadow Gold Hawaii since 1999.

Meadow Gold as a brand has existed in Hawaii for more than a century after seven Oahu dairy farms doing business as Dairymen’s Association Ltd. acquired use of the Meadow Gold name from Continental Creamery Co. of Topeka, Kan., in the early 1900s.

Several mainland dairy giants have owned Dairymen’s, which later became Meadow Gold Dairies Hawaii, since 1929.

The last Meadow Gold dairy farm in Hawaii closed in 2001, and since then the company has mostly imported mainland milk for processing and distribution.